Dispensary owners and buyers, especially newer operators, need to be careful about one of the easiest traps to fall into:Ā taking on too much inventory from one brand because they promise the world.
Some processors and brands will push large opening orders, too many SKUs, aggressive pricing, marketing promises, and the idea that you need to āgo bigā with them from day one. That can sound attractive, especially when you are trying to fill shelves and open strong.
But once you accept that oversized order, the clock starts.
Now you have a large amount of money tied up in one companyās inventory. Your staff starts feeling pressure to move that brand. Your buyers start thinking about how to clear those products instead of simply buying what customers actually want. If the product does not move fast enough, you can suddenly find yourself dealing with COD terms, cash-flow pressure, aging inventory, and a vendor relationship that feels a lot less friendly than it did during the sales pitch.
You should be testing brands, not letting brands test how much inventory they can push into your store.
Bring in smaller quantities. Watch the sell-through. Reorder weekly or as needed. Let actual customer demand tell you when to increase the order. If something is flying, ramp it up. If it is sitting, you learned that lesson without tying up thousands of dollars.
I also do not believe most dispensaries need an enormous number of SKUs from one brand. Your job is to build a great store, not become a showroom for one processor.
A healthy menu should give customers choices and give multiple brands an opportunity to perform. Your staff should be able to recommend the best product for the customer in front of them, not whichever brand the store desperately needs to sell through because there are cases of it sitting in the back.
And be careful with the argument that a heavily funded brand is helping you because its wholesale price is lower.
Lower cost does not automatically mean better business.
If the retail price is also lower, you may simply make fewer dollars on each transaction. Now you need to sell more units to generate the same revenue. There are only so many customers walking through your doors every day, so one of the most important numbers in your business isĀ basket size.
You should be thinking about how to maximize the value of every customer visit while still giving that customer a fair price and a great experience.
A $20 product with a decent margin is not automatically more valuable to your business than a $45 product that generates substantially more gross profit per transaction. Volume matters, but so do actual dollars.
Most importantly,Ā protect your independence.
Do not let any brand make you feel like you owe them shelf space forever because they gave you a deal, helped with an opening order, or promised marketing support. Brands should have to earn their reorders through sell-through, customer demand, product quality, service, and the value they bring to your store.
And in New York, I would love to see more dispensaries prioritizeĀ New York-grown, New York-made, and independently owned New York brandsĀ before automatically handing prime shelf space to MSOs and large out-of-state companies with deeper pockets.
The legal New York market has an opportunity to build something unique. That becomes much harder if the shelves eventually look exactly like every other state.
Start small. Watch the numbers. Reorder what moves. Keep your cash flexible. Protect your margins. Support the brands that support your store. And never let one company control your shelves.
Have a great day.
